Drawing on their own experiences and those of the Massachusetts Institute of Technology Enterprise Forum, the authors show entrepreneurs how to write convincing and winning business plans.Ī comprehensive, carefully thought-out business plan is essential to the success of entrepreneurs and corporate managers. Investors want to know when they can cash out and how good the financial projections are. Marketers want to see evidence of customer interest and a viable market. Also important is satisfying the needs of marketers and investors. A good mousetrap is important, but it’s only part of meeting the challenge. Too many entrepreneurs, though, continue to believe that if they build a better mousetrap, the world will beat a path to their door. And the plan must be outstanding if it is to win investment funds. Without a plan furnished in advance, many investor groups won’t even grant an interview. The business plan admits the entrepreneur to the investment process. To make a convincing case for a rich return, get a product in the hands of representative customers-and demonstrate substantial market interest. They’ll want a 35 to 40% return for mature companies-up to 60% for less mature ventures. To figure out how much to invest in your offering, investors calculate your company’s value on the basis of results expected five years after they invest. Don’t skimp on the numbers, get overly optimistic about them, or blanket your plan with a smog of figures covering every possible variation. Give realistic, five-year forecasts of profitability. Venture capital firms usually want to cash out in three to seven years professional investors look for a large capital appreciation. Show when and how investors may liquidate their holdings. From there, assemble a credible sales plan and project plant and staffing needs.Ĭashing out. Project realistic growth rates at which customers will accept-and buy-your offering. State how you will continually innovate to survive.
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